Feasibility Study for Establishing a Portland Cement Manufacturing Plant in Libya

• Osama Elgadi

  University of Tripoli- Faculty of Engineering

  Author

• Mohamed Abu Al Niran

  Faculty of Engineering, University of Tripoli, Libya

  Author

• Abdul Muin Rashid

  Faculty of Engineering, University of Tripoli, Libya

  Author

Background: The cement industry is important to the country`s economic along with the infrastructure development, with Portland cement leading the global constructions. In Libya, cement demand has recently grownup sharply due to infrastructure projects and reconstruction efforts, however, domestic supply is inadequate. Several local plants operate below their capacity due to operational inefficiencies, logistics problems, and reliance on imports. Consequently, local production falls short of rising demand of million tons annually, leading to supply shortages, price instability, and foreign exchange pressure. These challenges highlight the need to reinforce domestic cement production to support sustainable development.

Aim: This study aims to investigate the feasibility of establishing a new plant for the manufacture of Portland cement in Libya, addressing the identified gap between the supply and domestic demand for cement. The primary aim was to assess the viability of such a project through an analysis of market conditions, technical requirements, and financial implications.

Methods: The methodology followed a feasibility study technique, combining market analysis, technical assessment, and financial evaluation to determine the project’s overall viability

Results: The market analysis revealed a noteworthy annual cement demand gap of approximately 1.7 million tons, with the proposed plant targeting a production capacity of 255,000 tons per year (15% of the gap). The technical study detailed the phases required for cement manufacturing from site selection to raw material along with description of machinery, energy and labor force requirements. The financial analysis shows a positive Net Present Value (NPV) of 18,964,827 Libyan Dinars over a 15-year period at a discount rate of 10%, alongside an Internal Rate of Return (IRR) of 32%, which is significantly bigger than the required rate of return. The payback period for the initial investment is anticipated within 6 years, and the analysis shows that the project is economically viable with a profit margin of 20%.

Conclusion: The study concludes that founding a new cement factory in Libya is feasible and has the potential to contribute to the domestic economy, reduce reliance on imports, and create new employment opportunities

1. Mohamed Abu Al Niran, Faculty of Engineering, University of Tripoli, Libya

   ³Faculty of Engineering, University of Tripoli, Libya

2. Abdul Muin Rashid, Faculty of Engineering, University of Tripoli, Libya

   ³Faculty of Engineering, University of Tripoli, Libya

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